NZDUSD rallied on Thursday on the back of the US inflation data which was a relief to markets as it missed the mark and fanned the flames of a Federal Reserve pivot. As per the past series of technical analyses on NZDUSD this week, NZD/USD Price Analysis: Bears move in from key highs for the week, and the more recent, NZDUSD Price Analysis: Bears in control with eyes on daily trendline, the trajectory was adhered to ahead of the CPI and downside extremes reached as follows:
As for the daily chart, the price was bounded by resistance and it was stated that the doji could turn out to be pivotal for the pair and week:
It was stated, if the bears were to commit, then there would be prospects of a test of the broader trendline and a move into the key Fibonacci near 0.5850 in a 50% mean reversion:
The engulfment of the doji was noted as a potentially significant feature.
For the hourly template, this meant a continuation was in order:
Update:
The target was reached before US CPI sent the bird on a tear through all of the mark-down.
We need to bring up the daily chart again:
As seen, the trendline has been respected as we are clearing through resistance and we are now moving in on a price imbalance between 0.6026/85:
Such a continuation would coincide with a further downside in the US dollar vs. a basket of currencies:
The price of the US dollar index keeps falling on the day and while there could be more to go, we have the 107.86 target in as a possible support considering it made up a foundation for the highs of the cycle when last visited as support. A break there could be significant but the M-formation is a reversion pattern and a correction to the resistance near 109.63 could be in play if the bulls commit strong hands over the course of the coming days. Nevertheless, a vulnerable US Dollar gives the commodity complex fuel and the bird can glide higher on that.
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